Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
From
Apply today and get a fast decision on a secured vehicle loan up to $500,000.
There are some great car finance options around, but knowing where to get the best deal can be tricky. We compile the latest rates and deals from the major banks, smaller lenders and brokers from across New Zealand to help you pick the right option for you.
Read on to compare car loans, learn how to get the best deal, what to avoid, and more.
Car finance can work differently depending on the type of loan you take out and what kind of car you’re looking to purchase.
Typically, the following steps apply:
There are a wide variety of car finance options out there, these are the most common types you’ll come across.
With a secured car loan, the loan provider uses the vehicle you buy as security for the loan. The lender has the right to repossess the car if you default on your loan. As this type of loan is less of a risk to the lender, the rates for secured loans are usually lower.
With unsecured car loans, the lender doesn’t use an asset as security for the loan, which means your car won’t be repossessed if you stop making your loan repayments. These loans come with a higher interest rate, but you have more flexibility with the way you use the loan.
You can also lease a car for business or personal purposes. With leasing you don’t own the car but make regular lease payments until the end of the agreement. A car lease may give you the option to buy the car at the end of the lease term at a reduced price, or you can choose to give the car back and enter into a new lease agreement for a different vehicle.
If you take the time to compare car loans on finder.com.au, you’ll get a strong idea of what interest rates are available from a range of lenders. This gives you plenty of ammunition when it comes to negotiating with your own lender.
If you’re keen to stay with your own bank or credit union for your car finance needs, take your interest rate information with you when you make your enquiries. This will encourage the lending officer to see if there is any room to take a few extra points off the interest rate they offer you.
When you apply for a loan through the finance officer at a car dealership, you have lots of room to negotiate on rates. This is because the dealership often receives its loans at discounted rates, leaving it extra room to bump up the rate you pay. That margin between what the dealer pays to the lender and what you pay to the dealer forms their “trail” commission. In other words, every time you make a payment, some of it goes towards paying interest to the lender and some goes to paying commission to the car dealership. Haggle and negotiate on the rates you’re offered through the car dealership. It will usually have around 2% that it can drop from the initial rate that it quoted you.
Some banks will offer a discount on their advertised interest rates if you also have other banking products with them. If you already have a mortgage, a credit card and a transaction account with one bank, ask if it will give you a discount on your car loan if you add that to your package.
When most people go hunting for vehicle finance, they immediately look for a low-interest-rate car loan and believe they’re getting a great deal. Unfortunately, it is possible for the loan with the cheapest rate to end up costing you more over the term of the loan if you’re not careful.
How the cheapest rate could cost you more:
Consider a car that costs $25,000. One lender is offering a rate of 8% p.a. over five years, and another is offering a rate of 9% p.a. The only difference is the fees. Take a look at how much it could cost you if you opt for the cheapest rate:
| Lender A | Lender B | |
|---|---|---|
| Loan amount | $25,000 | $25,000 |
| Interest rate | 8% p.a. | 9% p.a. |
| Loan term | 5 years | 5 years |
| Monthly account fee | $20 | $0 |
| Establishment fee | $0 | $200 |
| Total monthly cost | $532.91 | $518.96 |
| Total repayment amount | $32,275 | $31,588 |
In the above example, the interest rate that is higher turns out to be the cheaper option, despite the initial up-front cost.
Getting car loan approval might seem quick, but there are several stages your application needs to progress through before the lender releases money to the car’s seller.
Some tips that can help those looking to take out a car loan include:
If you still haven’t found the information you’re looking for, check the FAQs below.
Remember that a car loan can be a significant financial commitment, so exercise diligence and compare a wide range of options before applying.
Finance Bloom secured vehicle finance review. Find out about rates, features and more.
If you want to reduce your taxable income but get something for it, such as your next car, you can consider salary sacrificing it with a novated lease. Find out exactly how it works and if its right for you.
Learn about the used car buying process, including what you need to check on the car and what financing options are available.
Find out which ute, the Ford Ranger or Toyota HiLux comes out on top.
Borrow up to $500,000 for your new vehicle, caravan, boat or motorcycle with a secured or unsecured finance from Kiwi Car Loans.
When you’re a temporary resident in New Zealand, you want to see everything, which can be difficult without a car. Luckily there are some lenders that consider car loans for people on a work or study visa. Find out how to apply here.
Get the best rate for your circumstances with a car loan from Motor Vehicle Finance. Answers within two hours.
The Lending People work with a number of lenders to help you get the best car finance for your situation.
